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Champalal Vs. Y. Nabi Khan and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKarnataka High Court
Decided On
Case NumberSecond Appeal No. 527 of 1955
Judge
Reported inAIR1960Kant289; AIR1960Mys289
ActsCode of Civil Procedure (CPC), 1908 - Order 21, Rule 97; Transfer of Property Act - Sections 91 and 92
AppellantChampalal
RespondentY. Nabi Khan and ors.
Excerpt:
.....of mortgage - until such payment is made to respondent, respondent entitled to benefit of possession of property which could be used as shield against any attack by appellant. - indian succession act (39 of 1925), section 59 & 63: [a.n.venugopala gowda, j] proof of execution of will held, when the genuineness /execution of the will is questioned, the due execution has to be proved by the person who produces the document to make or establish any claim. hence, to prove the execution of the will, the examination of at least one attesting witness is necessary. however, though a will, ordinarily must be proved, keeping in view the provisions of section 63 of the indian succession act and section 68 of the evidence act, in the event of the unavailability of the attesting witnesses..........has, in a considered judgment, held that the first respondent was subrogated to the rights of the prior mortgagee viz., adiramaiah by paying him off. he has further held that the only which has been paid to adiramaiah, the mortgagee, belonged to the first respondent himself and not to the mortgagor. as such, it cannot be said that the first respondent is the representative of the mortgagor. the learned munsiff also states that when the person in possession (first respondent) has paid off a prior mortgage, the purchaser at the court sale (appellant) cannot sue for possession without paying off the mortgage which he has redeemed. in view of these circumstances, the learned munsiff held that the first respondent cannot be dispossessed so long as what he paid to adiramaiah is not paid back.....
Judgment:

(1) This Appeal arises out of the proceedings instituted for removing the obstruction to the delivery of possession of a house situated in Bangalore City. An application was filed under the provisions of Order 21 Rule 97 of the Code of Civil Procedure by the present appellant in the capacity of a purchaser of the said property in Court sale. Respondent No. 1 obstructed the delivery proceedings on the ground that he had purchased the said property from the original owner thereof and had also discharged the prior usufructuary mortgage of the said property in favour of one Adiramaiah Setty.

He also got possession of the said property and was subrogated to his rights. Respondents 2 and 3 are the tenants of the said property under the first respondent. The respondents' contentions were upheld by the trial Court. In appeal by the present appellant, the learned Subordinate Judge, Bangalore, while dismissing the appeal ordered that he is entitled to resist the delivery proceedings till the amount of Rs. 7,000/- was paid to him. This amount was paid by the first respondent to discharge the mortgage debt of Adiramiah. This second appeal is, therefore, filed by the appellant challenging the orders and judgment of the Courts below.

(2) A few facts and dates are relevant for a proper understanding of the case. One Rajmal Hasthimal obtained a money decree against one Jabbar. He got an order of attachment of the said property before judgment on 1-2-1950. The suit was decreed on 10-3-1950. In execution of the said decree, the appellant purchased the attached property on 13-3-1952 for a sum of Rs. 1,050/- subject to prior encumbrances. The sale was confirmed on 20-1-1953. Exhibit D is the sale certificate. On the strength of this certificate, he applied for delivery of possession of the property in Misc. Case No. 67 of 1953. The respondents obstruction. This was the application which was dismissed by the trial Court and which dismissal was upheld by the Subordinate Judge.

(3) The first respondent Nabi Khan purchased the said property from Jabbar, the judgment debtor of Hasthimal on 7-1-1952 prior to the Court auction of the said property in favour of the appellant as per Exhibit II for a sum of Rs. 20,500/-. He discharged the mortgage debt due to the first usufructuary mortgagee Adiramaiah by payment of Rs. 6,500/- towards to mortgage dues and Rs. 500/- towards the rent due to the said Adiramaiah Setty. This usufructuary mortgage of Adiramaiah Setty is dated 6-12-1947 and is evidenced by Exhibit I in the case.

(4) The main contention of the appellant is that the respondent is not entitled to subrogation in the absence of a registered agreement between him and the Judgment-debtor as per the provisions of section 92 of the Transfer of Property Act. His legal status is nothing better than that of a representative of the mortgagor. On the other hand, it is contended by the first respondent that as purchases he has an interest in the property mortgaged as per section 91(a) of the Transfer of Property act. Having redeemed the mortgage of Adiramaiah he steps into his shoes.

Even otherwise, it is contended on his behalf that the sale deed which is a registered one sufficiently protects his interests. In any case, it is urged that he is entitled to the reimbursement of a sum of Rs. 7,000/- paid by him to the original mortgagee Adiramaiah and until that amount is discharged, the appellant is not entitled to delivery of possession. The appellant was himself bound to discharge this debt in order to perfect his title. That was a mortgage debt due long prior to his obtaining any title to the property under the Court sale. In fact, it is urged that the sale certificate granted to the appellant Exhibit D clearly mentions that his sale is subject to prior encumbrances.

(5) The learned Subordinate Judge has, in a considered Judgment, held that the first respondent was subrogated to the rights of the prior mortgagee viz., Adiramaiah by paying him off. He has further held that the only which has been paid to Adiramaiah, the mortgagee, belonged to the first respondent himself and not to the mortgagor. As such, it cannot be said that the first respondent is the representative of the mortgagor. The learned Munsiff also states that when the person in possession (first respondent) has paid off a prior mortgage, the purchaser at the Court sale (appellant) cannot sue for possession without paying off the mortgage which he has redeemed. In view of these circumstances, the learned Munsiff held that the first respondent cannot be dispossessed so long as what he paid to Adiramaiah is not paid back to him. These seems to be great force in these findings and I accept them.

(6) The important point to be considered is whether the first respondent Nabi Khan is entitled to subrogation. As stated supra, the usufructuary mortgage of Adiramaiah Setty was long prior to both the sales--one in favour of Nabi Khan and the other in favour of Champalal. It is held by the Sub-Judge that the first respondent Nabi Khan has discharged this debt by the payment of a sum of Rs. 7,000/- out of his own funds. Was he bound to do so? Had he any interest in the property? Section 91(a) of the Transfer of Property Act states:

'Any person......................who has any interest in or charge upon the property mortgaged or in or upon the right to redeem the same, may redeem the mortgaged property.'

The first respondent is the purchaser of the mortgaged property. Hence he had sufficient interest therein within the meaning of this section. If so, he could redeem the property mortgaged. This clause excludes from its purview the redemption of a mortgage by a stranger or a volunteer. In no sense of the term can the first respondent be classified as such. In fact, it was absolutely necessary for him in order to save himself from loss, to discharge this debt. Otherwise, his title would be in a nebulous condition. There was grave necessary for him to redeem the said mortgage and if he does so out of his own funds, it follows that he stands in the shoes of the mortgagee whom he has paid off and is entitled to the benefit of that mortgage.

(7) In a recent decision of our High Court in Sonnekka v. Dombara Munekka, reported in 36 Mys LJ 458: (AIR 1959 Mys 39) his Lordship Hegde J. has stated while considering who are the persons having an interest in the property mortgaged as contemplated under section 91(a) as follows:--

'Be it noted that it is not merely the persons who have interest in or charge upon, the right to redeem but also persons who have interest in or charge upon the property mortgaged are entitled to redeem.'

Further, in a later part of the judgment, his Lordship lays down the principle as follows:

'It has been uniformly held that even the smallest interest in the mortgaged property is sufficient to entitle the plaintiff to redeen the mortgage.'

(8) Thus, having an interest in the property as per section 91(a), the appellant's case for subrogation falls within the first part of section 92 of the T. P. Act which runs as follows:

'Any of the persons referred to in section 91(other than the mortgagor) and any con-mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure, or sale of such property, same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee.'

If so, the first respondent has the same rights as the mortgagee whose mortgage he ahs redeemed. The mortgage in favour of Adiramaiah being a usufructually one, the first respondent gets the benefit of possession. In fact, it is in evidence that he is in possession of the property after having redeemed the mortgage of the said Adiramaiah. He is this in an advantageous position inasmuch as, his possession of the property is the same as that of the mortgagee. He can use it as a shield against the subsequent auction-purchaser, viz., the appellant. As stated previously, the auction sale in favour of the appellant was subject to the prior mortgagee. Adiramaiah's mortgage has come into existence years before the auction sale. Hence unless he discharges the prior mortgage he will not be entitled to the possession of the property. Rightly therefore, have the courts below refused to grant him the prayer for removal of obstruction by the first respondent.

(9) Such being the case, to me it appears that there is no need to consider whether the first respondent is entitled to subrogation in the absence of a registered agreement between him and the judgment-debtor viz., Jabbar. This question would arise if the case of the first respondent did not fall within the purview of the first part of section 92 of the Transfer of Property Act but was covered only by the third part of it which runs as follows:

'A person who has advanced to a mortgagor money with which the mortgage has been redeemed shall be subrogated to the rights of the mortgagee whose mortgage has been redeemed, if the mortgagor has by a registered instrument agreed that such persons shall be so subrogated.'

(10) I consider that in the circumstances of the case it was not necessary for the first respondent to protect himself by getting a registered agreement as contemplated under this third part. Hence it is unnecessary to refer to a catena of decisions cited by Sri Srinivasa Iyengar, the learned counsel for the appellant on this point most of which are briefly reviewed by the learned Author Mulla in his book on Transfer of Property under the Heading 'Convenant excludes subrogatiob.'

(11) There is another aspect of the case that requires consideration. As stated earlier, the first respondent has discharged the mortgage of Adiramaiah. In any case, he has to be reimbursed to the extent of that sum. The auction sale in favour of the appellant was also subject to the prior mortgage. Otherwise, he gets the benefit of the mortgage even though the first respondent has discharged it. That would fall under the category of unjust enrichment.

(12) In a case of this Court in Gaviya v. Lingiah, reported in (S) AIR 1957 Mys 65, a purchaser of mortgaged property who paid up the amounts due under the decrees had to give up those properties as his vendor had no title thereto. The question arose whether he was entitled for the recovery of the amount paid in discharge of the mortgage. In fact, he had to relieve the liability of the mortgagee by payment of the amount. It was held by a Bench of this Court that as the plaintiff had acted bona fide not as the properties were freed from the liability by such payment the person who is to be benefited by it should reimburse the plaintiff to that extent.

'The tendency of persons who profit themselves at the expense of others, to deny reparations to those who have helped them to appropriate the fruits of the acts of others is not favoured in Courts and the doctrine of unjust enrichment is often invoked to promote the ends of justice.'

Their Lordships held further that the plaintiff came under the purview of section 91(a) and the first part of section 92 of the Transfer of Property Act and that he was subrogated to the rights of the mortgagee whose mortgage he had redeemed. The term 'having interest' was elucidated as follows:

' The criterion of 'having interest' is that there should be a reasonable basis for a person to honestly act upon in a manner which cannot be regarded as improper or wanton and not that the interest should be such a cannot be successfully challenged by anyone.......Interest in making payment does not mean such an interest as will stand the test of a judicial trial and all that is necessary is that the person making the payment should honestly and really believe the payment to be necessary in his own interest. It seems repugnant to justice and equity that those who get or want to retain the advantage resulting payments made by others should be immune from the obligation of making good the same and that bona fide alienees who clear off encumbrances binding nature of which is not open to doubt, should be denied reimbursement because of the alienation being attacked later on and being found to be defective or ineffective. It has been held in the cases referred to that relief cannot be denied on this ground.'

Applying the principle enunciated in the above decision to the facts of the present case, no other conclusion is possible except that the first respondent is entitled to the amount of Rs. 7,000/- paid in discharge of the mortgage and until such a payment is made to him, he is entitled to the benefit of possession of the property which he has obtained from Adiramaiah and which could be used a as shield against any attack by the appellant.

(13) In the result the judgment passed by the learned Additional Subordinate Judge, Bangalore is upheld and this appeal is dismissed. As the appellant was under the impression that his case fell under the provision of part 3 of section 92 of the Transfer of Property Act and hence he had good authority to prefer this appeal, I consider that each party should bear his own costs in this Court.

(14) Appeal dismissed.


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